9.Following the breakdown of those negotiations, Gany informed solicitors
acting for Zorin, for the first time, that the whole of the Trust’s property
had been distributed by 2000 following the payments to each of the siblings in
1998. In February 2012 Gany, through solicitors, informed Zorin’s solicitors
that, to the best of its then director’s knowledge, no companies had ever been
held by the Trust.

10.In its original form, the respondents’ claim sought (against Gany only)
disclosure of information and documents about the Trust and its property,
including interests in companies. Gany’s initial response (in the form of an
affidavit sworn by its director Khalid on its behalf) in April 2012, was that the
Trust had never held any property other than an initial settlement sum of
US$100, that it had never had any interest in any corporate entities, and that
the payments made in 1998 to the children had not come from the Trust. This
case was repeated in Gany’s original defence, served in February 2013. In
short, Gany’s case was that the Trust was, and always had been, an empty shell.

11.By the time of trial both Gany and (after his joinder) Asif had conceded
that the shareholding in one company, namely European Commodities Hong Kong Ltd
(“ECL HK”) had been vested in Gany on the terms of the Trust, but it was said
that ECL HK owned no assets of its own of significant value, although it had,
purely as nominee, held shares in another company, Valson International Limited
(“Valson”), initially for MAR and later for Asif.

“In this case there is no evidence
that any property, other than the ECL HK shares, was the subject of a gratuitous
transfer to any of Schweizerisch Finance Ltd, Maly International SA or Gany
while each was Trustee of the Trust.”

15.Both Gany and Asif appeal that part of the Court of Appeal’s Order.
Their grounds are, in summary, that:

i)There is no such presumption in law as that identified by the Court of
Appeal as being derived from In re Curteis’ Trusts.

ii)The reversal by the Court of Appeal of the judge’s decision on the first
issue was therefore an illegitimate interference with unimpeachable
fact-finding by a judge who had heard all the evidence, based upon an error of
law.

17.It is convenient to begin with a re-statement of the basic principles by
which equity (which in this respect is shared by England and Wales and the
British Virgin Islands) provides for identification of beneficial interests
arising from a gratuitous transfer of property. First, if either the transferor
or the transferee makes a written (or oral) declaration as to those beneficial
interests, or they do so together in an agreed form, that will generally be
decisive, regardless of the subjective intentions of either of them: see for
example Whitlock v Moree [2017] UKPC 44. Secondly, and in default of any
such declaration, the court looks for evidence from which a common intention as
to beneficial ownership may be inferred. This may include evidence of
statements made by either party before, at the time of or even after the relevant
transfer, the parties’ conduct, and the factual context in which the transfer
takes place. Sometimes, a choice between possible conclusions as to beneficial
interest may properly be arrived at by a process of elimination, whereby the
most unlikely conclusions are first removed, leaving the least unlikely as the
correct one. Finally, recourse may be had to time-honoured presumptions, such
as the presumption of advancement or the presumed resulting trust, where there
really is no evidence from which an inference as to common intention may
properly be drawn. But these are, in modern times, a last resort, now that
historic restrictions on the admissibility of evidence have been removed, and
the forensic tools for the ascertainment and weighing of evidence are more
readily available to the court.

“I do not say that this case is so
clear as to be beyond a doubt, but the evidence seems to me sufficient to
enable me to pronounce an opinion as to the intention of the testator. When he
directed the sum of £2000 to be invested in the names of the four trustees he
did not communicate to them what he had done, and it must therefore be presumed
that he intended them to take it in the character of trustees only. He placed
the fund in their names by a deliberate act. What was his purpose in doing
this? Why did he select these four persons out of all the rest of the world? It
is contended that he intended a resulting trust for himself. What reason is
there for supposing this? If he had meant the fund for his own benefit, he
would have told the trustees of his intention. As he did not do so, it must be
presumed that he intended it to be held upon the same trusts as the trust fund
to which it was added. A considerable time elapsed before his death, and he did
no act during that period to shew any contrary intention …”

20.While it is true that the Vice-Chancellor twice used the word “presumed”
in that short passage, it is clear that he was not speaking of a legal
presumption, but rather of an inference to be drawn from the facts about what
the transferor said and did, set in the context of the pre-existing
relationship between him and his marriage settlement trustees. It is not a case
of a competition between competing legal presumptions (including for that
purpose the presumed resulting trust) but a pragmatic analysis of the
alternatives, and a sensible deduction as to what the transferor intended.

21.
style='font:7.0pt "Times New Roman"'>
The case was so described in Vandervellv Inland Revenue and Customs [1967] 2 AC 291, where Lord Upjohn was describing how easily the presumption of a
resulting trust could be rebutted by evidence of intention. At p 313D he said:

“A very good example of this is to
be found in the case of In re Curteis’ Trusts where Bacon VC, without
any direct evidence as to the intention of the settlor, drew a common-sense
deduction as to what he must have intended. In reality the so-called
presumption of a resulting trust is no more than a long stop to provide the
answer when the relevant facts and circumstances fail to yield a solution.”

24.By concluding that there was simply no evidence of a gratuitous transfer
of shares in any of the three companies to Gany while it was a trustee of the
Trust, the judge disabled himself, in the Board’s view, from conducting a
reliable analysis of such evidence of MAR’s intention as there was, set against
the relevant background, namely the pre-existing relationship between MAR and
Gany as, respectively, the effective settlor and the recently appointed trustee
of the Trust. Consideration of the question whether a common-sense deduction of
the type carried out in In re Curteis’ Trusts thus never arose for the
judge, because the necessary predicate for it, namely a gratuitous transfer by a
settlor to an existing trustee of the settlement, was not focused upon. Nor was
that analysis carried out, at least expressly, by the Court of Appeal, because
it decided the question on the basis of a wrongly assumed legal presumption.

27.In the Board’s view, the determination of the first issue turns
essentially upon the making of an appropriate common-sense deduction as to
MAR’s intention, to be derived from a review of the largely unchallenged
evidence about the relevant parties’ conduct at the time, assisted by the
judge’s findings of primary fact, to the extent that they have not been challenged
successfully on appeal. MAR’s intention is sufficient, because he was also the
governing mind of Gany at the material time, as its only director and
shareholder. The Board will summarise that evidence of primary fact in broadly
chronological order.

34.As already noted, Gany became trustee of the Trust in place of MISA in
November 1993. The bulk of the shares in ECL HK were, on MAR’s instructions as
a director of MISA, transferred by nominees to Gany on 16 March 1994, expressly
to be held upon the terms of the Trust. Two days later on 18 March ECL BVI
(then controlled by MAR) allotted its only share to Gany. It is not known when
the shareholdings in Schweizer and Cedilla were issued or transferred to Gany,
but the only evidence about the timing of those events tendered at trial was
that they had occurred by the end of 1994.

39.The first question is whether the shares in the three companies were
indeed vested in Gany. Notwithstanding the appellants’ submission to the
contrary, it makes no difference in the Board’s view whether they were vested
by way of transfer or allotment, because MAR both owned and controlled each of
the three companies. Allotment might be said to be the exercise of control
whereas transfer is the exercise of a right of ownership. But both point in the
same direction, so far as concerns the ascertainment of MAR’s intention.

40.Written evidence from Asif that the shareholdings of the three companies
were vested in Gany is not the same as proof, bearing in mind in particular the
inevitable reservations which the Board must entertain about his reliability as
a witness. His evidence was that the vesting of those shareholdings in Gany was
part and parcel of an agreed plan between him and MAR to transfer beneficial
ownership to him, and this the judge roundly rejected, for good reason. The
assertion by Asif that there was a plan to transfer beneficial ownership of the
three companies to him (eventually by giving him the bearer share in Gany) was
of course self-serving. But his evidence that the shareholdings in the three
companies were vested in Gany,viewed separately, was not self-serving. On the
contrary, it constituted a necessary plank in any case, hostile to his, that
the shares in the three companies were property of the Trust. Nor was his
evidence of the vesting of those shares itself a matter of challenge, although
of course his case that there was an agreement that he should become beneficial
owner of them was vigorously, and successfully, disputed at trial. There is
documentary corroboration of the vesting of ECL BVI’s shares in Gany, and no
evidence to place in the scales against Asif’s evidence that this was true in
relation to the shareholdings in each of the three companies. Accordingly the
Board considers that the vesting of those shares in Gany before the end of 1994
should be regarded as proved to the requisite standard.

41.The next question is whether this vesting occurred while Gany was a
trustee of the Trust. It was submitted for the appellants that no finding or
inference could be made to the effect that either Schweizer or Cedilla were
vested in Gany after it became trustee of the Trust in November 1993. There was
a three-year period following the incorporation of Schweizer and an eight-month
period following the incorporation of Cedilla before Gany became trustee.
Either or both of them might have been vested in Gany before it became trustee.
This is of course possible, but the Board’s view is that the vesting of the
shares of those two companies in Gany probably occurred after it became trustee
in November 1993. Even if not, it occurred at a time when MAR planned that Gany
should take over as trustee from MISA. Their incorporation and the transfer of
their shares to Gany was all part and parcel of an exercise by MAR to re-locate
part of his business interests, in terms of corporate ownership, in the British
Virgin Islands, which began with the incorporation of Gany in November 1989.
That uncertainty as to timing does not, in the Board’s view, significantly
detract from the other factors which point towards determining this issue by
considering the three companies together.

43.A beneficial transfer to Gany was, of course, stage one of Asif’s
two-stage case about a plan to transfer beneficial ownership to him, rejected
by the judge. No other evidence was adduced as to why MAR should have intended
to make the three companies (all registered in the British Virgin Islands)
wholly owned subsidiaries of another British Virgin Islands company. The only
evidence about MAR’s use of Gany, apart from the vesting of the shareholding in
the three companies, was that he wished it to be trustee of the Trust, and he
caused to be vested the much more important shareholding of ECL HK in Gany as
trustee, only two days before the vesting of the shares in ECL BVI. It is
material to note, in that context, that no evidence was produced to the court
that Gany ever prepared or kept company accounts, which it might have been
expected to do if it beneficially owned assets of its own rather than held them
purely as trustee.

44.The second alternative, namely vesting in Gany on the terms of the Trust
is, in the Board’s view, plainly the most likely common-sense deduction, just
as it was in In re Curteis’ Trusts. MAR had (or contemplated) a
relationship with Gany as settlor and trustee of the Trust when the shares were
vested in Gany. There is clear evidence, summarised above that MAR intended
Gany to hold the important shareholding in ECL HK on the terms of the Trust.
There is no sensible reason why he should have entertained a different
intention in relation to the shares of the three companies. It is, in this
context, nothing to the point that there is clear documentary evidence in
relation to the shares of ECL HK, but no similar evidence in relation to the
shares in the three companies. Prior to vesting in Gany, the bulk of the shares
in ECL HK were held by a third-party entity, not controlled by MAR, to which
MAR needed to give clear and specific instructions. He had no such need in
relation to the three companies’ shares, since he both owned and controlled
those companies himself.

“I think that MAR retained
beneficial ownership, or ultimate beneficial ownership of his businesses, down
to the date of his death.”

The judge was there dealing with Asif’s case that MAR
agreed to give him all his business interests in the early 1990s and the judge
drew support for his observation from the fact that MAR retained beneficial
ownership of his stake in a Malaysian joint venture, and did not transfer it,
beneficially or otherwise to Asif. But the judge’s observation was also based
upon his conclusion that it was “highly unlikely” that MAR had transferred any
of his business assets other than ECL HK to any of the successive trustees of
the Trust. Finally, he read MAR’s declaration of 1 July 1994 as reinforcing his
conclusion.

49.An independent ground for Gany’s and Asif’s defence of the proceedings
was that, whatever may have been the property of the Trust on MAR’s death, it
was all appointed out to Asif by Gany by means of the 1998 Appointment. The
respondents challenged this at trial, seeking a declaration that the 1998
Appointment was void or liable to be set aside on a number of grounds,
including sham, and a challenge to the validity of the board meeting of Gany at
which the Appointment had been resolved to be made. Those grounds were rejected
by the judge, and are not live issues before the Board.

56.The extent to which the directors laboured under a misconception about
the value of the ECL HK shares when making the 1998 Appointment is less
straightforward. There is some force in the appellants’ submission that the
Court of Appeal was over-simplistic in its departure from the judge’s findings
of fact, in assuming that, because the directors’ evidence was that they
regarded the Trust as having property of no significant value, they were
necessarily unaware of the entry in ECL HK’s audited accounts attributing a
value of US$357,000 odd to those shares. It was pointed out by reference to the
transcripts of the trial that, contrary to the Court of Appeal’s assumption,
the judge had been aware of those accounts. It was submitted that, if so, he
may have concluded either that the attributed value (based on a historical cost
convention) was unreliable, or that the directors could properly regard that
sum as insignificant in the context of dealing with what had been MAR’s
business assets amounting to many millions of dollars.

57.If the matter had rested upon issues as to the value of the shares in
ECL HK, the Board might have regarded the appeal on this issue as finely
balanced. But the inclusion within the ambit of the directors’ misconception of
the shares in the three companies is, in the Board’s view, amply sufficient to
swing this issue against the appellants. Mr Crow valiantly submitted that it
made no difference because the shareholdings in the three companies had not
been shown to be of significant value in themselves. There was, he said, no
evidence that the three companies were, in 1998, more than mere shells. But the
absence of evidence about the assets of the three companies cannot, in the
Board’s view, be of assistance to the appellants. On the basis that the three companies
were part of the Trust’s property at all material times, Gany was duty-bound to
inform itself about the nature and value of their assets, and cannot fairly
shield itself under the cloak of a submission that no evidence was deployed to
demonstrate valuable assets. Following his father’s death, Asif had plainly
been in the driving seat so far as the affairs of Gany and the Trust were
concerned and, in particular, having regard to what he now describes as
repeated deceptions of his siblings about the nature and extent of the Trust
assets over many years, can be in no better position than Gany.

58.The Board is in no doubt that the failure by Gany’s directors in 1998 to
appreciate that the shareholdings in the three companies formed part of the
Trust’s property amounted to a serious breach of fiduciary duty on the part of
Gany, sufficient to trigger the court’s discretionary power to set aside the
1998 Appointment. It was submitted for the appellants that, nonetheless, the
“would not/might not” causation test was not satisfied, and that no useful
purpose would be achieved by setting aside the 1998 Appointment, which would
otherwise simply cause an injustice to Asif. The Board disagrees. For the
reasons already given, it does not lie in the appellants’ mouths to make this
submission. It was submitted that the Court of Appeal’s use of the word “void”
rather than voidable in para 101 of the judgment of Blenman JA revealed a
misconception that the court had no discretion in the matter. The Board is
satisfied that this was no more than a judicial slip of the tongue. Read as a
whole the Court of Appeal’s reasoning, and the terms of its March 2016 Order,
sufficiently demonstrate that it was aware that it was exercising a
discretionary power. The Board has not heard anything in the appellants’
submissions which would cause it to doubt that the discretion was correctly
exercised in the circumstances and, in particular, having regard to the Court
of Appeal’s conclusion on the first issue, with which the Board agrees.

60.The Board disagrees. Asif was not a bona fide purchaser of the property
which he received by virtue of the 1998 Appointment. On the contrary, he was a
volunteer. Nonetheless, until set aside, the 1998 Appointment conferred upon
him both legal and beneficial ownership of the assets transferred. But the
effect of the setting aside of the 1998 Appointment is to re-vest the
beneficial ownership of the assets transferred in the beneficiaries of the
Trust. If Asif still holds property transferred in 1998, he must return it to
the trustee of the Trust. If not, he must give an account of what he has done
with it.

“On the Construction Issue, the
effect of the March 2016 Order is that the entirety of the Order made at first
instance by Mr Justice Bannister is set aside.”

The effect of this further order was that the judge’s
costs order in favour of Asif was itself treated as having been set aside by
the Court of Appeal’s March 2016 Order. Asif appealed the further order of the
Court of Appeal, submitting that it had got the construction of the March 2016 Order
wrong.

65.This is a very short point of construction, which requires the Court of
Appeal’s March 2016 Order to be interpreted as a whole, and in the light of its
conclusions on the appeal.